How Do You Solve the HR Shared Services Paradox?

Over the last 15 years, HR Shared Services has evolved from just offering cost effective solutions to a value added process in the overall HR function. Typical to any industry and sector, the asks have been ever changing and now reach an inflection point where the demands are fighting for a share of existence and impact on decision making.

Though there are many challenges to be solved with a limited set of resources, the below situations continue to pose a paradox for all who are managing this space. Let’s see how organizations are decoding this.

Transactional Versus Tactical

Industrialized Versus Customized

Predictable Versus Need Based

Globalized Versus Localized

Cost effective Versus Customer Centric

Do more with same or Less

The very objective of setting up an HR shared services center is to shift the heavy transaction-based, recurrent activities so that they can be done at a lower cost and in a structured way. But when we continue to do these activities over a period of time, we tend to develop Subject Matter Expertise and end up sitting on a mountain of information. Expectations are now to make logical sense out of this data and see how we can be more tactical and value based in our delivery. Moving from transactional to tactical comes with a cost and also requires shift in the resource mix as the initial expectation was to cut cost.

What we have seen is that, in such a paradox, we have to divide our manpower and split it into low cost, transaction-based, versus high-impact, skill-based resources; and run this in a factory model where the first few pit stops are focused on high volume and repeat transactions, and the last few pit stops focus on trending and analysis and garnering meaningful insights from the data. We thereby convert loads of scattered data points into executive insights. It's generally true that the people who are the closest to data/transactions are the ones who are able to provide real time and implementable executive inputs as they feel the pulse of the business.

As we further evolve, therefore, we face a paradox:

“Do we keep our costs low and provide industrialized solutions which are one size fits all?Or do we allow room for customized and needs-based solutions?”

The decision is tough as the very essence of Shared Services is to provide low-cost predictable solutions in a controlled environment which are not impacted by opposing vectors. But given the environment we all operate in, the only thing that is not available is a “CONTROLLED ENVIRONMENT.” We all love to operate in static environments with minimum ambiguity but we can only wish.

In my experience, we can be both predictable and industrialized as well as customized and needs-based. Though it sounds difficult, there are ways to achieve this. The levers to provide such opposing solutions are: tools that are customized/configured on a real time basis while processing; a dynamic work force model that can be compressed and stretched over short periods; and dynamic pricing models. There has to be a fair mix of elements based on all 3 levers: Tools, Pricing, and Workforce. We have seen that, by using these levers and breaking the output into high volume, seasonal, cyclic, level of complexity, and spread, we can create working business models to solve this challenge of industrialized vs customized.

Although we touched on the topic of cost, it is important to discuss what kind of cost are we talking about: Build Cost, Maintain Cost, Invest Cost, or Lost Cost.

Sounds tricky but each of these costs impact the longevity and effectiveness of the solution in the shared services model. Build Cost normally promotes Industrialized solutions; Maintain Cost promotes low-cost solutions; Invest Cost promotes customized and business critical solutions; and Lost Cost contributes to cost saved on any of the said parameters but server impacting all other parameters.

Moving on, let's discuss customers. They are always of the opinion that the level of support a Shared Services Center provides can never match real time, face-to-face support. It takes a lot for a shared services model to move customers away from this thinking.

So what does it take?

Normally, our solutions are designed in workshops where both the requestor and implementer have opposing agendas. Requestor wants the solution to be close to business requirements, and implementer wants it to be as linear as possible with documented dependencies, SLAs, KPIs, etc.

The solution should be able to solve customer needs but any deviation, exception, or segmentation should be clearly documented and both requestor and implementer should work towards managing them. The agreement should be made to manage those deviations and their impact in terms of cost, efficiency, and timelines. For end customer, the process should run seamlessly.

We all live in a world of cloud solutions that are available for all areas like HRMS, CRM, telephony, Knowledge Management, etc. Cloud solutions come with a defined way of working.

The other paradox that has to be solved while keeping customer satisfaction in mind, is whether we fit our processes to solutions, or whether we force-fit our solutions to the processes? There is no right answer. Again it depends on size, complexity, maturity, and segmentation of the processes. However, it is advisable to tailor the processes to suit the solutions. If not possible, create patches and secondary and tertiary solutions to be implemented which can comprehend these factors and lead to seamless results.

The expectation to do more with the same or fewer resources has been mounting as organizations are faced with the challenges of reducing cost. Below are some levers that we have used to create more efficiencies and bandwidth to solve mounting cost pressures.

A fair mix of options and decision-making between Lift and Shift versus Fix and Shift Implementations

Mix of Centralized vs Decentralized delivery options to manage process complexity, variations, language, and local requirements and making this a dynamic, fit to requirement model

Robust case management and knowledge base enablement

Multi-tier governance model

Clear scope, hand-offs, SLAs, and KPIs; agility to align them to business requirements

Enablement of Center of Excellence in all delivery areas and breaking teams into Transactional, Tactical, and Strategic categories to handle different facets of delivery

Centralized reporting and automation

Moving to DIR Model (Design, Implement, and Run) which focusses on bringing the right skill set and competency mix for the right segment of delivery component

Trending and Forecasting models to establish trends and patterns basis past and ability to modulate future use of this

I can end by saying that there is no Golden Rule for Success. In the world of HR Shared Services, success lies in agility, comprehending customer needs, transforming needs into action and the ability to provide 360 degree view to delivery, right from requirement gathering to delivering output.

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